Europe Stocks Steady as Travel Shares Jump, Defensives Drag

(Bloomberg) -- European stocks were little changed after spending most of the session in red, as a surge in travel and leisure shares offset declines in defensive sectors.

The Stoxx Europe 600 Index closed up less than 0.1% after sliding as much as 0.5%. Travel & leisure shares jumped 3.5%, led by a rally in Flutter Entertainment Plc after it entered a $4.2 billion U.S. deal, while the sector also got a boost after Deutsche Lufthansa AG said it will add additional flights following a surge in bookings.

Stocks were weaker earlier after data showed that U.K. output shrank for the first time since June amid restrictions to slow a resurgence of Covid-19. As final Brexit talks continue, France warned it could veto a trade deal between the U.K. and the European Union if it doesn’t like the terms.

European stocks are hovering near a February high after record monthly gains in November, fueled by optimism that progress in coronavirus vaccines will spur an economic rebound.

“As markets move around record high levels, we can expect some trading sessions of wait-and-see mood with more news around stimulus needed for stocks to keep gaining,” said Diego Fernandez, chief investment officer at A&G Banca Privada in Madrid. “There is still money waiting to enter the market, so as soon as we have more positive news, further gains can be expected.”

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